News Corp nears deal to buy stake in Yankee sports network

Pedestrians walk past a sign outside of the News Corporation Headquarters building in New York July 22, 2011.
REUTERS/Lucas Jackson

By Ronald Grover

News Corp (NWSA.O) is expected to announce this week that it has taken a minority stake in the YES Network, a New York-based sports channel that broadcasts Yankee baseball and Nets basketball games. The deal could be announced as early as Friday, according to a person with knowledge of the transaction.

The deal would expand News Corp's network of 13 Fox regional sports channels and four other channels in which it is affiliated. Those channels have 67 million subscribers in Los Angeles, Houston and other cities.

The YES network is available in approximately 15 million homes.

News Corp will buy portions of the stakes held by Goldman Sachs (GS.N) and Providence Equity Partners, which are expected to maintain positions, the source said.

The Yankees would maintain a 34 percent stake through parent company Yankees Global Enterprises, according to the Wall Street Journal, which first reported the pending transaction.

The price of the deal was not disclosed, although YES is valued at about $3 billion, according to the source.

A Fox spokeswoman could not be immediately located. A YES spokesperson was not available.

The deal would allow YES to raise the $2.99 monthly fee per subscriber it currently charges cable and satellite operators to carry the channel, said the person. News Corp could negotiate on its behalf with the operators as part of a larger package of sports channels.

At the outset, the Fox sports channels are not expected to provide local or national sports programming to YES.

News Corp is also not expected to take a management role.

James Murdoch, News Corp Chief Executive Officer Rupert Murdoch's younger son, had a role in negotiating the deal. The younger Murdoch sits on the Yankee Global Enterprises board and increasingly is taking management responsibility for the company's non-news cable channels, Fox broadcast network and other TV assets.

(Editing by Lisa Von Ahn)

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